Articles

SUSAN KELLEHER
JAN 18, 2019

 4 MINUTE READ

When it comes to home buying and selling, each generation has its own style. How buyers search for a home, what they look for and how they pay for it is often tied to where they are in their life’s journey.

That’s not to say that all members of a generation are the same — or that every transaction unfolds predictably, based on the age of those involved. But there are certain tendencies and shared experiences that distinguish one generation from the next when it comes to home.

Here’s a look at some of the generational differences uncovered in the Zillow Group Consumer Housing Trends Report 2018.

Each generation has its own priorities

Millennials, the generation between the ages of 24 and 38, take a more maverick approach to buying than their parents and grandparents. About 9 out of 10 millennials (92 percent) begin the search for home by themselves, and 60 percent say they prefer to take the lead in finding their home.

Older buyers cast the widest net when it comes to relocating. Free from concerns about school districts, proximity to jobs and commute times, home buyers who retired and moved in the past 12 months were more likely to move to a different state than movers who didn’t retire (37 percent versus 12 percent).

Silent generation buyers (age 74 and older) are the most mobile. One-quarter of them move out of state, compared with 8 percent of millennial and 9 percent of Gen Z buyers (ages 18-23).

Preference in home size and type varies by generation

In general, buyers overwhelmingly prefer single-family homes, and more than 76 percent go on to purchase one. Outside of detached single-family homes, however, each generation has its own preferences.

Millennials are the most likely to purchase a townhome (13 percent do), while silent generation buyers are more likely to buy manufactured homes and condos (15 percent and 13 percent, respectively).

Gen X buyers (ages 39-53), who are more likely to have dual incomes and children under 18 living at home, are the keenest for single-family homes: 89 percent say they want one, and 82 percent buy one.

Younger generations tend to “move up” when they buy, while older generations tend to move to homes of similar size or scale down. For instance, on average, Gen X buyers add 642 square feet, while Gen Z buyers add 228 square feet and millennials add 285 square feet. Silent generation buyers, however, lose 187 square feet.

What buyers care about most in a home

Older buyers place the most importance on a spare or guest bedroom, possibly to accommodate grown children or grandchildren. Nearly 3 in 4 silent generation buyers (74 percent) rate a spare bedroom as very or extremely important, along with 66 percent of baby boomers and 56 percent of Gen X buyers.

Younger buyers are more interested in renting out part of their living space. It may be because their peak earning years are still in front of them or they’re raising kids or paying hefty mortgages — or some combination of the three. But 35 percent of Gen Z buyers and 36 percent of millennial buyers say it’s extremely or very important to earn rental income from their home. By comparison, only 21 percent of Gen Xers, 9 percent of boomers and a mere 3 percent of silent generation buyers hold that view.

Younger buyers, who are more likely to use public transit, care most about their commute. Sixty-eight percent of millennials and 66 percent of Gen Z buyers rate their commute as a very or extremely important consideration. 

Younger buyers also tend to place greater importance on neighborhood diversity than older generations: 48 percent of Gen Z and 42 percent of millennial buyers say living in a racially diverse neighborhood is very or extremely important to them, compared with 28 percent of Gen Xers, 18 percent of baby boomers and 22 percent of silent generation buyers.

Most buyers are likely to have inspections, but millennial buyers are most likely to exercise caution when buying, possibly because they’re first-timers. Ninety-three percent of millennials have inspections performed, compared with 82 percent of baby boomers.

Down payments can vary in size

The number of buyers who put down 20 percent or more toward their home purchase increases as buyers age, with the silent generation bringing the most money to the table. Thirty-five percent of millennials, 48 percent of Gen Xers, 51 percent of boomers and 62 percent of silent generation buyers put down 20 percent or more on their home purchase.

Buyers who live with young children at home typically put down less than 20 percent (55 percent versus 49 percent for buyers without kids at home). These buyers may be tapped out by child-rearing costs and education expenses, finding it more difficult to save up.

Younger buyers who obtain mortgages get a greater share of their down payment from family and friends than do older buyers with mortgages. On average, the share of their down payment that came from gifts or loans from family or friends is 20 percent for millennials, 15 percent for Gen Xers, 8 percent for baby boomers and 3 percent for silent generation buyers.

Regardless of how they get there, however, most buyers say they love their home and are likely to stay put as they settle in: 62 percent spend a decade or more in their new home before they find themselves back in the market as sellers.